06.20.201711 min read

Annual Reviews: How to Simplify the Process

You’ve promised your employees they’d get annual evaluations. It’s early December. It’s time to get them scheduled. How are you feeling about that? 

You’re not alone if you’re feeling pinched. It’s an annual evaluation. How the heck can you remember what’s happened over an entire year? Have you been keeping notes? Probably not and, if you’re anything like me, I can barely remember what’s happened over the past week.

It doesn’t have to be this way if you’ve got a couple of “management” processes in place. 

There are two key processes that you’ll need:

  1. Periodic one-on-one meetings
  2. The performance evaluation 

I’m making an assumption that everyone in the organization has a job description—effective job descriptions used not only for hiring, but for on-boarding, training, managing, and evaluating. If you don’t, well, that’s a topic for another article.

If you have good job descriptions with links to well-documented processes, you no longer need to manage “people.” You can manage “processes.” Use your job descriptions as a management tool hold your staff accountable to the processes they agreed to when they were hired. If they follow the processes and deliver consistent and reliable results to the expectations of the company, then they’re doing a great job and the performance evaluation will be a piece of cake.

The one-on-one meeting:

It’s critical that a manager has periodic one-on-one meetings with their reporting employees. These can be once a week, twice a month, once a month, or at a minimum, once a quarter. They should be consistently scheduled and there should be guidelines. For example: 

  • Schedule them consistently (every Wednesday at 3 p.m., or the first Friday of each month at 11 a.m., for example)
  • Have a consistent duration (30 minutes, 45 minutes, 60 minutes—whatever works)
  • Start and end on time per the duration agreed to above
  • Have an agenda (see the sample)
  • Be prepared—it should only take 10-15 minutes to prepare the agenda
  • No interruptions; no texting, emailing, or taking calls during the meeting 

As the name implies, these are individual, one-on-one meetings. The manager is sitting down with their reporting employee and talking about how things are going, not just about the things the employee may have done wrong, or the everyday types of things that can come up or the on-demand types of things. This is about “how it is going here for you,” how their work is going, and how they’re doing personally. It’s an opportunity for the manager to check in with the employee, review the activities and the work processes the employee is supposed to be following and whether or not they are achieving what is expected of them. 

Use their job description to facilitate this meeting 

The job description is a management tool. It tells each employee exactly what you and the company expect of them and exactly how to achieve those expectations. They know what they need to do and how to do it. The job description should identify all of the processes that the employee needs to follow and each process should have expectations or KPIs

In your one-on-one meeting, pick a process that needs attention (good or bad). Use the following questions to assist with your preparation:

  • What is expected? (What is supposed to happen?)
  • What is happening?
  • What’s working? What should they keep doing?
  • What isn’t working? What can they do better?
  • What advice or instructions can you offer as their manager?
  • Are there any personal issues getting in their way?

The one-on-one meeting is used to “acknowledge” an employee for work well done as well as to zero in on work issues that are in need of support. If you’re having these meetings weekly or monthly, you always have a “barometer” of how things are going for the employees you manage.

Let’s say, for example, you’re meeting with one of your salespeople. They’re not closing many sales. Other salespeople in the organization are achieving better results. One of the processes on their job description is a selling process with quantification. You decide that the issue for discussion in this one-on-one meeting is increasing this employee’s sales conversion rate and you prepare accordingly.

Or, maybe you have a salesperson whose exceeding expectations, they’re closing tons of sales. In this instance, you might acknowledge this employee for their performance and investigate what they’re doing that’s different. You can then use this information to innovate the existing sales process and then use the innovated sales process to train the rest of the sales team. Then everyone can close more sales.

As part of the preparation for the one-on-one meeting process, you’re writing up the items you wish to discuss and, upon completion, you’re making notes of the results of the meeting so you can follow up at the next meeting. You can use the form from the previous meeting to help with the preparation of the next meeting.

Now it’s time for the annual review

Think of how easy this could be. If you’ve been engaged in one-on-one meetings throughout the year, preparing and documenting the results from those meetings, you know exactly how each employee is doing. There’s no guess work. It’s not subjective. You’ve been meeting on these things for an entire year. The annual review is a simple wrap up of the year, a summary. It should only take about 10 or 15 minutes to prepare. It’s objective. It’s clear. It closes the loop on what needs to happen to manage the employee well. 

Once again, you’ll use their job description. If they’ve been paying attention to their job description, following the documented processes they find there, and achieving what is expected of them, their performance evaluation will go well. Why shouldn’t it?

And, if you’ve been engaged in one-on-one meetings consistently throughout the year, there should be no surprises. By this point, if an employee has underperformed, not followed the company’s processes and disappointed you as their manager, they’ll probably no longer be around.

For the annual review, we recommend a simple form to complete. The heart of the form includes all of the processes itemized on their job description. Along with those are some more general evaluators, (see sample). Then you simply follow the annual review process below:

  • Prepare the evaluation forms
  • Schedule the evaluation meeting with the employee
  • Give them their evaluation form to complete
    • Remind them how it needs to be completed. They will be using this form to rate themselves on a scale of one to five, where a three is what is expected. Less than three is less than expected and greater than three is above and beyond what is expected. (that is the rating scale we suggest)
    • No written comments are required if the employee achieves a grade of three, what is expected of them, for each item on the form.
    • If a “grade” is lower or higher than three, a note of explanation is required.
    • Make sure they know that it must be fully completed prior to the review meeting.
  • Use the Manager Form to document your evaluation of the employee over the period. Use the same guidelines as described above for the employee. This should be fairly easy as you’ve been meeting with the employee throughout the year. You can review your One-on-One Meeting agenda notes if necessary.
  • Complete the employee review meeting
    • Walk through the evaluation forms together
    • Review all items where the grade is above or below expectations (notes should have already been documented for each of these), and have a discussion. Edits can be made if necessary. Maybe you’ve given the employee a grade of two and they’ve given themselves a grade of three on a specific process. You’ll have a comment on why you gave them a two. Share that with them and listen to their rebuttal. Maybe there’s something you don’t know about and, if so, you can edit their evaluation—their score card, if you will.
    • Total their evaluation and determine whether or not they will be receiving a raise and or a bonus (this will be determined by your raise and bonus policy—more on that later too)
    • Discuss what actions are necessary for follow up and create a follow-up plan

In closing

More and more of your new hires are of the millennial generation, less than 40 years of age. Here are some astonishing statistics from a Gallup report on employees born between 1980 and 1996.

  • 21 percent say they've changed jobs within the past year, this is more than three times the number of non-millennials
  • Half of the millennial workforce doesn't see a future with their existing company.
  • Only 29 percent are engaged at work, meaning only about three in 10 are emotionally and behaviorally connected to their job and company.
    • 16 percent are actively disengaged, meaning they are more or less out to do damage to their company.
    • The majority of millennials (55 percent) are not engaged, leading all other generations in this category of worker engagement.

Clearly, most companies are not giving their employees compelling reasons to stay. And, whether you have three employees or 300 employees, employee turnover costs you a lot of money and a lot of stress and disruption.

Millennials desire direction, acknowledgment, and communication. While they can come across as wanting more and more, the reality is that they’re looking for a job that feels worthwhile—and they will keep looking until they find it. Your job is to create an environment where they want to stay. 

These two simple processes—the one-on-one meeting and the performance evaluation—will help make that happen. With them, you can engage your employees. They give you and the employee a place and a time to share ideas, to communicate and explore, to adjust the course. Your people will feel that you’re paying attention, that you “regard” them or “see” them which can, in turn, provide them a sense of value, a connection to their job and to your company. It will reduce employee turnover, increase employee retention and, as a result, save you a ton of money, time and effort.

As with any project, if you carve it up into smaller pieces, using the periodic one-on-one meeting, for example, the annual performance review is quick and easy. It’s a piece of cake. 

2017 Strategic Planning Kit - Download Now
Michael Mills.jpeg

Michael Mills is one of the managing directors of Business Design Corporation, a business development company for small and mid-size businesses. Michael was a Master Certified E-Myth consultant for many years delivering Gerber’s E-Myth Mastery program to many hundreds of entrepreneurs before deciding to focus specifically on creating a tool and a process to make it really easy to systemize your business.

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